Tat Hong Holdings Limited

[karlmarx]

Loss of $5m this quarter. Selling some assets and paying down debts. Overall effect on balance sheet is small, but at least the direction is commendable. Debt to equity remains high at 74%. Management remains optimistic on improving condition in Australia.

http://infopub.sgx.com/FileOpen/1QFY2018...eID=467010

[karlmarx]

Private placement to raise cash? Sale of its China business unit?

Or outright sale to Chinese investors?

http://infopub.sgx.com/FileOpen/Tat%20Ho...eID=471360

'The Board wishes to inform shareholders that the Company has been approached by certain parties in
connection with a potential transaction in relation to the securities of the Company. The discussions are ongoing and there is no certainty or assurance whatsoever that any transaction will arise from these
discussions. The Company has appointed Rippledot Capital Advisers Pte. Ltd. as its financial adviser in
connection with such approaches.'

[PkNanas]

Private placement to raise cash? Sale of its China business unit?

Or outright sale to Chinese investors?

http://infopub.sgx.com/FileOpen/Tat%20Ho...eID=471360

'The Board wishes to inform shareholders that the Company has been approached by certain parties in
connection with a potential transaction in relation to the securities of the Company. The discussions are ongoing and there is no certainty or assurance whatsoever that any transaction will arise from these
discussions. The Company has appointed Rippledot Capital Advisers Pte. Ltd. as its financial adviser in
connection with such approaches.'

Based on the wording, it is potential outright acquisition of Tat Hong as the company, not its business unit or subsidiary.

Separately, OCBC  Securities just ceased coverage of Tat Hong yesterday !
https://www.theedgesingapore.com/ocbc-ce...l-recovery

Just wonder what OCBC failed to see/appreciate which are highly valued by the potential acquirer?

[karlmarx]

OCBC Securities ceased coverage because price and trading volume of Tat Hong has been falling over the years.

It could be the massive number of cranes that can be readily deployed to work that the buyer is interested in. Because, what else?

[PkNanas]

OCBC Securities ceased coverage because price and trading volume of Tat Hong has been falling over the years.

It could be the massive number of cranes that can be readily deployed to work that the buyer is interested in. Because, what else?

I think OCBC Securities is being short-sighted, for ceasing coverage just because price and trading volume.
As equity market anticipate the future, following link likely show that Tat Hong key market (Australia and China) to pick up:

China: http://www.scmp.com/news/china/economy/a...al-numbers
Australia: http://budget.gov.au/2017-18/content/glo...wth-01.htm

[odie]

wah
 what will happen next?

[karlmarx]

http://infopub.sgx.com/FileOpen/Tat%20Ho...eID=477748

It is clear that SCBPE is not interested in extending the offer to all shareholders, or buying up the whole company, since they are only acquiring 29% of the shares.

I also think it is likely that this will be a placement, rather than the Ng family selling out. After all, SCBPE will want the Ng family to remain as operators of the company, and to have substantial skin in the game.

If so, this deal will be good for the company (to remain as a going concern), but no so good for shareholders due to the probable dilution.

Probably the Ng family has run out of cash for another rights issue.

[weijian]

http://infopub.sgx.com/FileOpen/Tat%20Ho...eID=477748

It is clear that SCBPE is not interested in extending the offer to all shareholders, or buying up the whole company, since they are only acquiring 29% of the shares.

I also think it is likely that this will be a placement, rather than the Ng family selling out. After all, SCBPE will want the Ng family to remain as operators of the company, and to have substantial skin in the game.

If so, this deal will be good for the company (to remain as a going concern), but no so good for shareholders due to the probable dilution.

Probably the Ng family has run out of cash for another rights issue.

Should be a MBO right (Mgt Buy out)? ie. Mgt + SCBPE come together to form a new entity and buy out the rest of the shareholders to take it private...very similar to what happened to Select Group previously. Normally, that's how the PE playbook works.

[karlmarx]

I'm not sure. If so, why acquire only 29% of the shares? Ng family owns 42.5% while AIF owns 7.08%.

[weijian]

From the Bloomberg article below, it states that the controlling family and SCBPE will own 71% and 29%, as the final intention.
https://www.bloomberg.com/news/articles/...firm-stake

Finally, in the PE playbook, buy/sell is not the only way for SCB to make money. Since they are the bank too, they can make money through become the bridging loan provider for the controlling family, and have their brokerage to do the acquisition work.